This promises to be a pivotal year for taxpayers. With special interests and their allies gearing up to push for tax increases at the November ballot box, we will see whether Californians have had enough or will give the green light for more spending. Gov. Jerry Brown’s 2016-17 budget plan sets a record for spending while reflecting a modest, yet uneven, economic recovery. It should be clear that raising taxes is not necessary.
I give the governor credit for having a dose of fiscal responsibility in his budget. I am encouraged that he has heeded Republican priorities to protect education opportunities for students, pay down debt and build the state’s Rainy Day Fund. We must continue to do these things to ensure that California has a bright future.
The governor correctly warned the Legislature that “it would be shortsighted in the extreme to now embark upon a host of new spending only to see massive cuts when the next recession hits.”
Despite some positive elements, the governor’s budget should not be seen as conservative. The budget is lacking in several areas, which I believe are designed to soften opposition to future tax increases at a time of expanding government and rising state revenue.
The budget’s General Fund would spend $122.6 billion, 6.2 percent more than the $115.4 billion approved for this year. State tax revenue continues to grow – from $116.9 billion this year to $124.4 billion next year. Compared with just seven months ago, the state now estimates it will receive $5.9 billion in unexpected new revenue. This windfall is clear evidence that the state does not “need” to increase taxes to fund essential services.
Critical priorities also remain unaddressed. While the governor’s budget does include a $3.6 billion proposal to improve our state’s roads and highways, it is basically the same plan that failed to pass last year. That proposal includes $3 billion of increased gas and diesel taxes, plus a new road user fee of $65 per vehicle – ignoring the fact that California just raised the price at the gas pump last year through its “cap-and-trade” policy, which already forces drivers to pay the nation’s highest gas taxes.
The budget ignores a proposal that Senate Republicans championed last year, which would have provided nearly $3 billion for California’s transportation infrastructure without raising taxes. Instead, the budget continues to use cap-and-trade dollars to fund the unpopular high-speed rail project.
The budget also shortchanges people with developmental disabilities. It provides a minor rate increase for community-based services, but more is needed to sustain the providers who offer vital services to help those with disabilities achieve independence. After years of cuts, the governor’s proposal falls far short of the overall 10 percent increase that advocates are requesting and that Democrats and Republicans support.
With smart spending decisions, we can fund critical priorities without raising taxes. Yet, there are efforts underway to raise taxes by watering down Proposition 13’s protections for homeowners and job creators. There are also efforts to extend 2012’s Prop. 30 income tax increases beyond their 2019 expiration date, even as Sacramento is spending at record levels, and Californians are bearing one of the heaviest tax burdens in the nation.
The governor’s budget rollout is just the beginning of a long process to produce a final budget in June, which I hope will meet our state’s challenges and protect taxpayers.